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The thing about personal finance is that it’s personal. Everyone’s situation is different. Even if your finances are almost identical to someone else’s, you may make different choices based on your beliefs.

However, there are some personal finance basics that can be fairly easily adapted to most people’s budgets and plans. You just have to know what they are. Take our personal finance quiz to test your knowledge.

1. Should you take money out of your 401(k) to pay the debt?

No.

But you can see how people could make this mistake. Debt is bad, right? So you want to get rid of it by any means possible (legal means, anyway). And a 401(k) is a type of savings. So why shouldn’t you take this savings out to pay your credit card bills? After all, the longer you take to pay them, the more you pay in interest. Aren’t you otherwise throwing that money away?

Not really, according to Michelle Singletary, financial columnist for the Washington Post. Singletary often uses lessons she learned from her financial mentor, Big Mama (her grandmother), when she gives advice to readers.

Singletary explains that even though Big Mama raised her and her four brothers and sisters on no more than $13,000 a year, “When Big Mama died, she owned her home, had paid off her car loan, had a beautiful collection of Sunday-go-to-church hats and a small savings account that supplemented her Social Security check.”

Singletary says that robbing your 401(k) account to pay your credit card debt is simply compounding the problem, which is that you spent more than you could afford. If you rescue yourself with your 401(k) money, you may do it again.

The way to address the problem, she says, is cut up the cards, cut back on expenses to pay the bill as quickly as possible, then stick to a budget in the future so that it doesn’t happen again. Of course, this can be easier said than done, so seek credit counseling if you think this might be too challenging for you.

2. Should you have more taxes withheld from your paycheck so you get a bigger refund from the IRS?

No.

Claiming 0 on your W-4 will mean more taxes will be taken out of your paycheck than if you claim 1. The higher the number, the fewer taxes are taken out.

Some people claim the lower number so that they will get a refund in the spring instead of having to pay. But this is no more than an illusion, and an expensive one at that.

You owe what you owe in taxes, and whether you pay them every week or at the end of the year will not change the amount (unless you take out no taxes and owe a lot. This can trigger a penalty from the IRS.)

So by paying extra into the system each week, you might think you are cleverly saving money, when in fact you are giving the government a free loan.

Don’t let the IRS keep your savings for a year.

If you do it because you think you would otherwise spend the money on items you want but don’t need, your idea of storing it with the IRS makes some sense, but that’s still misguided. It’s better to find an alternative way of saving it.

This depends somewhat on your level of strength. Try having part of your paycheck direct-deposited in a savings account. You can even open one at another bank so that getting to the money isn’t as easy as simply logging on and making a transfer.

If you don’t think that would work, try having a relative hold it for you. Just make sure it’s someone you can trust!

As a last resort, you can put the money into a certificate of deposit. This will earn you more interest than a savings account, and you will be less likely to withdraw it because there is a penalty involved. The drawback to this is that you will not be able to get your hands on the money in an emergency.

But you wouldn’t be able to do that if the IRS had it either.

3. True or false: The best place to keep your money is in a savings account.

False. —– Mostly.

It’s much better to keep your money in a saving account than in a coffee can in the cupboard over the fridge, mostly because if there’s a fire, your life savings is gone.

You may be thinking that another advantage of keeping your money in a savings account is the interest it pays. But have you looked at interest rates for savings accounts lately? They’re hovering around 1 percent. Online banks pay a little more — 1.65 percent — but it’s still chump change.

They warn you, however, to not tie up all your money in these types of investments. You need some cash you can get to in an emergency. Vanguard recommends three to six months’ worth of living expenses.

4. True or false: You should put whatever you can afford into retirement savings.

False.

Saving for retirement should be a priority. Often, young people feel like retirement is a long way away, and they turn their attention to more pressing matters.

While you must pay your student loans and your other bills, try to get used to a concept called paying yourself first. It means you work hard for your money, you deserve some security, and the best way to achieve that is to prioritize saving. This is a way to protect your future financial status.

Make saving a part of your regular ‘expenses’. While you should be saving for retirement, you may also be saving money for a vacation or maybe for a college education. You can’t neglect to pay your bills to contribute more to your retirement account (or any other savings plan), but you shouldn’t view your contributions as a luxury.

Find out what your savings goal should be for someone your age with your income and expenses. Then see if you can hit that target. If you realistically can’t now — even if you cut out movies and happy hours — don’t beat yourself up over it. But make it a goal and work toward achieving it.

5. It’s always better to save your money instead of spending it.

False.

Go ahead, spend some. It’s OK.

We are able to get away with answering false by adding “always” to the question. It’s almost never good to always do anything. And it’s true with money. Our moms and our accountants and financial advisors are always telling us to stop spending so much and start saving. This is good, useful advice. You don’t ever want to be left with no cushion to fall back on in old age or an emergency.

You may even need cash for a nonemergency, like investing in your brother’s food truck or lending your daughter money so she can get the divorce she needs.

But don’t take the practice of saving too far. You don’t want to be a miser, and you don’t want to deny yourself all the pleasures of life.

The internet is full of advice on how much to save and when to spend, but the truth is that this is a personal decision. If you have your six-month saving cushion, is everything after that fair game to spend? And what should you spend it on? An unforgettable trip with someone special? A 70-inch TV? Lots of shoes? Lunch out every day for a year?

Everyone has their own priorities and they have to make the choices they are comfortable with.

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